Who Owns Guinea’s Bauxite? Certainly Not Those to Whom It Belongs — The People

Having more bauxite than any other country on the planet, is it any wonder that mining companies from four continents breathlessly bang on Guinea’s door to get a piece of the action? If you add the sleight-of-hand management of the industry by Conde , his son, and assorted mining ministry schemers and top it off with “guidance” from flim-flam artist and Iraq war criminal, Tony Blair, how the hell could the people of Guinea receive any benefit?

The following article is from Deutsche Welle as well as the above video.

November 22, 2012

Who owns Guinea’s bauxite?

No other country has as much bauxite as Guinea-Conakry. The government is planning a new law to secure 30 percent of shares in the mines, against the wishes of foreign investors.

With a proud smile on his face, supervisor James Camara points to one of his excavators with a rotating shovel that is digging deep into the earth. The machine does three jobs. It first takes the rock out of the ground, then crushes it and loads it on to a truck. Camara says up to 750 tons of rock per hour can be extracted. “That’s enough for seven truckloads.”

The trucks belong to the Moscow-based company Rusal which also owns the Balandou mine in Debele, a small town in the region of Kindia in the west of the country. Mangroves and mango trees grow around the open mine. The earth is red and smells burnt. Within it lies Guinea’s greatest treasure – the aluminum ore bauxite.

No processing industry in Guinea

The red earth contains Guinea’s greatest treasure

Trucks take the bauxite earth to the station where it is loaded on to freight trains which take it to the provincial capital Kindia. It will then leave the port of Conakry to travel by ship to Ukraine. There aluminum is produced from bauxite and exported all over the world. In Guinea itself, there is still no industry to transform the red treasure into the coveted metal, even after 53 years of independence.

With a new mining law, the government plans to increase the benefits from the mining business. In September 2011, the National Transitional Council approved the new law. The idea is for the state to get up to a 30 percent share of the mines which make large profits from the extraction of bauxite and iron.

Enforcing this law is not easy as most of the mining companies are owned by foreign companies. The Guinean government is currently negotiating with the World Bank and the International Monetary Fund about now it can be implemented. They do not want to violate international law and scare off foreign investors, many of whom are already apprehensive.

Pavel Vassiliev, Africa representative of the Russian company Rusal, sees the mining companies adversely affected by the new law.

“Given the global crisis in the aluminum sector, a number of investors have already seen no alternative but to leave Guinea,” said Vassiliev.

A fraction of profits for the people

Neighboring countries like Sierra Leone and Liberia have already fought for greater shares in the extraction of their resources.

But so far Guineans have had little benefit from their country’s mineral wealth. About 200,000 people live in the provincial capital Kindia, less than an hour’s drive from the mines. Even from far away the green hills that frame the city can be seen.

At the provincial administrative office in Kindia the corridors are in total darkness because there is no electricity. The officials are all middle-aged. Thick layers of dust cover the files. An agreement between Guinea and the mine operators states that Rusal should give back 0.01 percent of the profits from its bauxite production – which is about one US dollar (77 euro cents) per ton. This money was supposed to go to the province, but for a long time now nothing has come in, says provincial administrator Dramane Conde. “This is not the fault of Rusal. The army came to power in 2008 and people did not want the money to go to unauthorized channels,” he said. The company had been waiting for democratic structures to become established before releasing the funds.

Struggle for lost wealth

Rusal is now investing and making a direct contribution to the region. In 2012 the company paid 350,000 euros to supply two villages with electricity. One of them is Mambia, a small community of mud houses which lies between the mines and the capital, Conakry. In addition to bauxite mining, the people here live mainly from agriculture. The green leaves of the cassava plant shine in the fields. “Rusal has built schools, a health center and has brought electricity to the village,” says community leader Kande Oumar Camara. “That has been a great help for people with small businesses.”

But for many politicians that is not enough. They want as much as possible of the bauxite profits to remain in the country. According to Ousmane Kaba, Minister for Strategic Issues, Rusal should dig deep into its pockets. “First of all, the mines belong to Guinea,” he says. Currently there are differences of opinion with Rusal. Preliminary studies had shown that Rusal should transfer almost a billion dollars to Guinea – for payments not made.

Bauxite for development?

The biggest problem for Conakry, however, is that the law can not be applied retroactively. That means that the major raw material deals of recent years, in which foreign companies have secured thick slices of the bauxite cake for themselves, are not affected.

But the bauxite, which will be extracted at the Balandou mine in Debele and elsewhere, could soon make a greater contribution to Guinea’s development. If the state would ensure that the mining revenue does not end up in dark channels but, for example, is used to build better roads, then the new mining law would benefit the Guinean people.